Old Mill Townhomes

“Home, sweet home” means a mortgage payment less and less often these days.

Despite historically low home prices, Americans are renting in greater numbers than ever. Nationally, the trend reflects an unstable housing market while many are choosing to rent.

“The housing collapse certainly illustrated that homeownership isn’t always a ‘can’t miss’ investment and entails disadvantages as well as benefits,” said Jim Lapides, public relations director for the National Multi-Housing Council. “We’re seeing long-term demographics that favor renting.”

The number of U.S. renter households grew by almost 4 million between 2005 and 2010. It is estimated that the number of renter households nationwide will increase by 360,000 to 470,000 annually over the next decade.

The majority no longer believe that a home purchase as a stable investment. That whole mentality has changed. People aren’t anticipating their home’s value will continue to increase like they used to. There’s a case for renting that wasn’t here five years ago.

A significant segment of renters are also young people who want to remain unfettered to a specific area or region.

About 76 million members of the Millennial Generation, those born in the 1980s and early 1990s, are entering the housing market, primarily as renters.
 
If it fits your lifestyle, renting an apartment in Lynchbug, VA is a good investment. Young people don’t want to be tied down. They’re at the beginning of their lives and they want to avoid the commitment and the cost of homeownership.

Original article – Shreveport Times

One of the most popular home ownership myths in Lynchburg, VA is that owning a house is a huge tax break as compared to renting.  I don’t know how many times people have personally told me that they want to buy a home because they NEED a tax deduction!  I just shake my head in disbelief because I have done the math.  

If your mortgage interest and other qualifying expenses such as charity contributions aren’t more than the standard deduction, ($11,600 for joint filers in 2011), there is no tax advantage to owning a home as opposed to renting a townhouse in Lynchburg, VA.  Assume that you buy a $200,000 house with a 5% downpayment at a 6% interest rate.  Your mortgage interest for the year would be $11,336.  The Standard Deduction for joint filers is $11,600.  

In this example, there is NO TAX BENEFIT.  Even when there is a tax benefit, you most likely paid much more money to maintain the house than you are saving in taxes.  If your mortgage interest is more than the standard deduction and you choose to itemize, there is little to no advantage.  

For example, assume that your mortgage interest in 2011 is $15,000.  You would get to deduct an additional $3400 if you itemize BUT you spent $15,000 in mortgage interest to save $850 on your taxes (assuming 25% tax bracket).    

Don’t forget that you would also have all of the other expenses of home ownership that you would not have incurred when renting a townhouse in Lynchburg, VA in an HHHunt community.